US growth up, but not enough to help Obama

The Politics Behind the Latest Government Economic Report

US GDP grows 2% ahead of presidential election

GDP Rises 2% in 3rd Quarter, Consumer Spending Increases

3XSQ: U.S. GDP expands 2%

National Income and Product Accounts Gross Domestic Product: Third Quarter 2012 (advance estimate)

Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 2.0 percent in the third quarter of 2012 (that
is, from the second quarter to the third quarter), according to the "advance" estimate released by the
Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent.
The Bureau emphasized that the third-quarter advance estimate released today is based on source
data that are incomplete or subject to further revision by the source agency (see box below). The
"second" estimate for the third quarter, based on more complete data, will be released on November 29,
2012.
The increase in real GDP in the third quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), federal government spending, and residential fixed
investment that were partly offset by negative contributions from exports, nonresidential fixed
investment, and private inventory investment. Imports, which are a subtraction in the calculation of
GDP, decreased.
The acceleration in real GDP in the third quarter primarily reflected an upturn in federal
government spending, a downturn in imports, an acceleration in PCE, a smaller decrease in private
inventory investment, an acceleration in residential fixed investment, and a smaller decrease in state and
local government spending that were partly offset by downturns in exports and in nonresidential fixed
investment.
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FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted
annual rates, unless otherwise specified. Quarter-to-quarter dollar changes
are differences between these published estimates. Percent changes are
calculated from unrounded data and are annualized. "Real" estimates are in
chained (2005) dollars. Price indexes are chain-type measures.
This news release is available on BEA’s Web site along with the Technical Note and Highlights related to this release.
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Final sales of computers added 0.17 percentage point to the third-quarter change in real GDP
after subtracting 0.10 percentage point from the second-quarter change. Motor vehicle output subtracted
0.47 percentage point from the third-quarter change in real GDP after adding 0.20 percentage point to
the second-quarter change.
The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.5 percent in the third quarter, compared with an increase of 0.7 percent in the second.
Excluding food and energy prices, the price index for gross domestic purchases increased 1.3 percent in
the third quarter, compared with an increase of 1.4 percent in the second.
Real personal consumption expenditures increased 2.0 percent in the third quarter, compared
with an increase of 1.5 percent in the second. Durable goods increased 8.5 percent, in contrast to a
decrease of 0.2 percent. Nondurable goods increased 2.4 percent, compared with an increase of 0.6
percent. Services increased 0.8 percent, compared with an increase of 2.1 percent.
Real nonresidential fixed investment decreased 1.3 percent in the third quarter, in contrast to an
increase of 3.6 percent in the second. Nonresidential structures decreased 4.4 percent, in contrast to an
increase of 0.6 percent. Equipment and software decreased less than 0.1 percent, in contrast to an
increase of 4.8 percent. Real residential fixed investment increased 14.4 percent, compared with an
increase of 8.5 percent.
Real exports of goods and services decreased 1.6 percent in the third quarter, in contrast to an
increase of 5.3 percent in the second. Real imports of goods and services decreased 0.2 percent, in
contrast to an increase of 2.8 percent.
Real federal government consumption expenditures and gross investment increased 9.6 percent
in the third quarter, in contrast to a decrease of 0.2 percent in the second. National defense increased
13.0 percent, in contrast to a decrease of 0.2 percent. Nondefense increased 3.0 percent, in contrast to a
decrease of 0.4 percent. Real state and local government consumption expenditures and gross
investment decreased 0.1 percent, compared with a decrease of 1.0 percent.
The change in real private inventories subtracted 0.12 percentage point from the third-quarter
change in real GDP after subtracting 0.46 percentage point from the second-quarter change. Farm
inventories subtracted 0.42 percentage point from the third-quarter change after subtracting 0.17
percentage point from the second-quarter change. Nonfarm inventories added 0.30 percentage point to
the third-quarter change after subtracting 0.29 percentage point from the second-quarter change.
Real final sales of domestic product -- GDP less change in private inventories -- increased 2.1
percent in the third quarter, compared with an increase of 1.7 percent in the second.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 2.1 percent in the third quarter, compared with an increase of 1.0 percent in the
second.
Disposition of personal income
Current-dollar personal income increased $89.3 billion (2.7 percent) in the third quarter,
compared with an increase of $130.3 billion (4.0 percent) in the second.
Personal current taxes increased $13.2 billion in the third quarter, compared with an increase of
$20.2 billion in the second.
Disposable personal income increased $76.1 billion (2.6 percent) in the third quarter, compared
with an increase of $110.0 billion (3.8 percent) in the second. Real disposable personal income
increased 0.8 percent, compared with an increase of 3.1 percent.
Personal outlays increased $111.4 billion (4.0 percent) in the third quarter, compared with an
increase of $57.4 billion (2.0 percent) in the second. Personal saving -- disposable personal income less
personal outlays -- was $445.0 billion in the third quarter, compared with $480.3 billion in the second.
The personal saving rate -- personal saving as a percentage of disposable personal income -- was 3.7
percent in the third quarter, compared with 4.0 percent in the second. For a comparison of personal
saving in BEA’s national income and product accounts with personal saving in the Federal Reserve
Board’s flow of funds accounts and data on changes in net worth, go to
www.bea.gov/national/nipaweb/Nipa-Frb.asp.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
5.0 percent, or $190.1 billion, in the third quarter to a level of $15,775.7 billion. In the second quarter,
current-dollar GDP increased 2.8 percent, or $107.3 billion.
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BOX. Information on the assumptions used for unavailable source data is provided in a technical note that
is posted with the news release on BEA's Web site. Within a few days after the release, a detailed "Key
Source Data and Assumptions" file is posted on the Web site. In the middle of each month, an analysis of
the current quarterly estimate of GDP and related series is made available on the Web site; click on Survey
of Current Business, "GDP and the Economy." For information on revisions, see "Revisions to GDP, GDI, and
Their Major Components."
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BEA's national, international, regional, and industry estimates; the Survey of Current Business;
and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the
site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.
* * *
Next release -- November 29, 2012, at 8:30 A.M. EST for:
Gross Domestic Product: Third Quarter 2012 (Second Estimate)
Corporate Profits: Third Quarter (Preliminary Estimate)
* * *
Release Dates in 2013
2012: IV and 2012 annual 2013: I 2013: II 2013: III
Gross Domestic Product
Advance... January 30 April 26 July 31 October 30
Second... February 28 May 30 August 29 November 26
Third... March 28 June 26 September 26 December 20
Corporate Profits
Preliminary... ........ May 30 August 29 November 26
Revised... March 28 June 26 September 26 December 20
Comparisons of Revisions to GDP
Quarterly estimates of GDP are released on the following schedule: the "advance" estimate, based on
source data that are incomplete or subject to further revision by the source agency, is released near the end of the
first month after the end of the quarter; as more detailed and more comprehensive data become available,
the "second" and "third" estimates are released near the end of the second and third months, respectively.
The "latest"” estimate reflects the results of both annual and comprehensive revisions.
Annual revisions, which generally cover the quarters of the 3 most recent calendar years, are usually carried
out each summer and incorporate newly available major annual source data. Comprehensive (or benchmark)
revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as
improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S.
economy.
The table below shows comparisons of the revisions between quarterly percent changes of current-dollar
and of real GDP for the different vintages of the estimates. From the advance estimate to the second estimate (one
month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the
advance estimate to the third estimate (two months later), it is 0.6 percentage point. From the advance estimate to
the latest estimate, the average revision without regard to sign is 1.3 percentage points. The average revision
(with regard to sign) from the advance estimate to the latest estimate is 0.2 percentage point, which is larger
than the average revisions from the advance estimate to the second or to the third estimates. The larger average
revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements, such as
the incorporation of BEA’s latest benchmark input-output accounts. The quarterly estimates correctly indicate the
direction of change of real GDP 97 percent of the time, correctly indicate whether GDP is accelerating or
decelerating 72 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend
growth more than four-fifths of the time.
Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons
[Annual rates]
Vintages Average Average without Standard deviation of
compared regard to sign revisions without
regard to sign
____________________________________________________Current-dollar GDP_______________________________________________
Advance to second.................... 0.2 0.6 0.4
Advance to third..................... .1 .7 .4
Second to third...................... .0 .3 .2
Advance to latest.................... .3 1.2 1.0
________________________________________________________Real GDP_____________________________________________________
Advance to second.................... 0.1 0.5 0.4
Advance to third..................... .1 .6 .5
Second to third...................... .0 .2 .2
Advance to latest.................... .2 1.3 1.0
NOTE. These comparisons are based on the period from 1983 through 2009.